There were small gains across all Merino micron ranges and types on Wednesday, particularly among the FNF wools. This was followed by further gains on Thursday when the greatest gains were recorded from 17 to 19 microns.
Crossbred wools were up also. These gains were achieved despite a significant strengthening of the US exchange rate. It was one of the few times that the Eastern Market Indicator (EMI) has moved up in US currency this season.
Trade reports indicate that there was some good wool of offer this week, which attracted some strong competition. The lift in the market had a buoyant effect on sellers, resulting in a fall in pass-in rates to less than half of last week’s levels. One can never be sure of the reasons for a change in the market after one week.
Factors that could have had some impact include the size and quality of the offering and the lift in global economic confidence up until Thursday. It was the smallest sale of the season both nationally and in Melbourne; and South African sales are in recess until mid-August.
The weekly Eastern Market Indicator (EMI) continues to be below the same week last year (-367¢), while the season average still remain up on last year’s season average. The difference in the season average is now 64¢. In other countries, the Wool Services International crossbred indicators in New Zealand were down by 2 to 4% at the fine end, firm in the middle and down by 5 to 6% at the coarse end. Among other fibres, cotton December Futures rose early in the week, but were down by 2.7% to 69.12 US ¢ on Friday.
21,569 bales were on offer, compared with 32,693 bales last week (when all three regions sold). 6.1% were passed in, comprised of 5.3% in Sydney and 6.9% in Melbourne. Pass-in rates for Merino fleece and skirtings were 5.5% and 8.3%, respectively. 20,261 bales were cleared to the trade.
The year-to-date offering is 38,689 bales less (-2.0%) than at the end of the same week last year. It is unlikely to change at all with only one more sale this season. The US exchange rate lifted sharply this wool selling week, remaining above 101¢ until Thursday night. Financial analysts attribute this to a number of factors, including an improvement in global economic confidence, further expectations that Ben Bernanke will announce a third round of “quantitative easing” (printing money) this week and the success of the pro-austerity parties in Greece.
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